September 16, 2014 Volume XL, Issue VII & VIII Liberty Global plc Nasdaq: LBTYA, LBTYB, LBTYK

Dow Jones Indus: 17,131.97 S&P 500: 1,998.98 Russell 2000: 1,150.97 Trigger: No Index Component: NA Type of Situation: Business Value, Consumer Franchise

Price (LBTYK): $ 41.98 Shares Outstanding (MM): 779 Fully Diluted (MM) (% Increase): 829 (6%) Average Daily Volume (MM): 3.4 Market Cap (MM): $ 33,063 Enterprise Value (MM): $ 74,513 Percentage Closely Held: John Malone 3% econ., 28% voting 52-Week High/Low: $ 45.98/38.27

Trailing Twelve Months Price/Earnings: NM Price/Stated Book Value: 2.9x Long-Term Debt (MM): $ 40,739 Introduction Implied Upside to Estimate of Liberty Global plc (“Liberty Global,” “Liberty,” Intrinsic Value: 37% “LGI” or the “Company”) is the largest international Dividend: NA operator of cable systems with 24.5 million unique Payout NA customers. Under the direction of cable pioneer John Malone, Liberty Global has grown from a holding Yield NA company with investments in independent global cable Net Revenue Per Share: and programming at the time of its separation from TTM $ 19.36 Liberty Media in 2004 into the largest operator of cable 2013 $ NA systems in Europe. This has been accomplished 2012 $ NA through several reasonably-priced acquisitions that 2011 $ NA produced increasingly large synergies through network co-location, sales/marketing and central office sharing, Earnings Per Share: and capex savings, among other benefits. TTM $ NA Today, Liberty is the #1 operator in 9 of the 12 2013 $ NA countries or territories it operates in and has invested 2012 $ NA heavily to maintain best in class broadband network 2011 $ NA speeds and advanced video offerings. As a result, we Fiscal Year Ends: December 31 believe Liberty Global is best positioned to capitalize on 38 Hans Crescent long term tailwinds in Europe where Internet and pay Company Address: London, SW1X 0LZ TV penetration is still in a much less mature stage than United Kingdom in the U.S. Recent acquisitions and regulatory changes Telephone: 44 20 7190 6449 have also positioned the Company to develop a large CEO/President: Michael T. Fries business to business division and to introduce mobile Clients of Boyar Asset Management, Inc. do not own shares of Liberty services across its footprint (as a virtual network Global plc common stock. provider responsible for customer relationships). The Analysts employed by Boyar’s Intrinsic Value Research LLC own Company’s scale and maturing network are also shares of Liberty Global plc common stock. translating to growing EBITDA margins combined

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with declining capital intensity. With sharply lower average cost of debt in recent years, the Company’s free cash flow profile continues to expand. This plays perfectly into John Malone’s leveraged return on equity philosophy, which has enabled the Company to simultaneously spend an average of greater than $1 billion per year on share repurchases and pursue transformative acquisitions without significantly increasing leverage. Going forward, we project revenue growth slows from 5% historically to ~3.5% per annum while EBITDA margins stabilize near current levels. Placing a 9x EV/EBITDA multiple on 2017 projections, our intrinsic value estimate is approximately $58 per share for Liberty Global, implying 37% upside from current levels. Additional upside could come from stronger than expected revenue growth or margin expansion, accretive capital deployment, a successful spinoff and expansion strategy of the Latin America business, or even an eventual sale of the Company to a larger telecom provider.

History Liberty Global chairman and former engineer John Malone of “Cable Cowboy” fame was the key figure in building Tele-Communications Inc. (TCI), which was a small debt-burdened upstart cable operator when he joined Texas investor Bob Magness’ company in 1972. Mr. Malone had built TCI into the second largest U.S. cable provider by subscribers by the time he orchestrated its sale to AT&T for $59 billion in March 1999. As part of the deal, a separate AT&T Liberty Media Group tracking stock was created to house the numerous cable programming properties and other investments across the technology, media, and telecom sectors that TCI had built over the years. Approximately $5.5 billion in cash was also allocated to Liberty. Liberty Media already had a long history as a tracking stock under the TCI umbrella and Liberty remained under the control of John Malone and other former TCI/Liberty executives/directors following the TCI sale. Liberty Media was formally separated from AT&T into an independent company (Liberty Media Corp.) in August 2001 with John Malone retaining effective voting control through Class B shares and a complex voting arrangement with the Bob Magness estate.

Although TCI was sold at a healthy valuation at the peak of the market, Malone would later go on to express regret in exiting the U.S. broadband business. Malone and Liberty were more or less handcuffed from re-entering the U.S. cable industry due to regulatory complications given Liberty’s wide range of TV programming and satellite TV investments including an eventual controlling stake in DirecTV. Several spin-offs, in particular DirecTV in November 2009, finally freed Malone and co. to reenter the industry and they did so via Liberty Media’s investments in Charter Communications beginning in 2013.

In the interim, Liberty faced fewer regulatory restrictions in the European cable industry (although still running into some regional regulatory challenges over the years). Malone and co. saw an attractive opportunity to re-execute the TCI playbook of sorts there given Europe’s less mature, more fragmented cable market. At the time of the separation from AT&T in 2001, Liberty Media already held several stakes in international cable distribution and content properties. This included a minority stake in UnitedGlobalCom (UGC), then the largest broadband communications provider outside the U.S. with operations in 23 countries. UGC held cable assets in Australia and Latin America as well as a controlling interest in United Pan-Europe Communications NV, or UPC, then a leading European cable network provider with 7 million subscribers across 17 countries. The Liberty Media spinoff also included a 25% equity stake in UK cable television systems and TV programming company Telewest and a minority stake in IDT’s international telecom services business.

The late 1990s produced a massive debt-fueled telecom/cable infrastructure bubble not only in the U.S. but also globally. Although Liberty Media was not entirely unaffected by the bubble’s aftermath, the spinoff allowed Liberty to capitalize on the distressed markets to make some strategic investments. Most prominently, Liberty acquired a majority of UGC equity in early 2002 through a debt-for-equity recapitalization. However, the Telewest investment did not fare as well. After writing off its equity stake that was once worth in excess of $3 billion, the Company tried to combine highly indebted Telewest and its UK cable competitor NTL but faced stiff opposition from NTL bondholders. Liberty eventually sold its remaining 7.5% stake following Telewest’s recapitalization in 2004, only to miss the 2006 merger with NTL and Virgin Mobile to form what would be renamed Virgin Media. Liberty also failed to close a deal for debt burdened Deutsche Telecom’s cable assets in 2002 in large part due to disagreements with German regulators over stringent cable systems upgrade requirements.

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In June 2004, the predecessor to Liberty Global was separated from the broader Liberty empire via a tax free spinoff incorporated as Liberty Media International. The spinoff and the associated rights offering gave Malone and Liberty shareholders a separate stock currency to better facilitate further investment opportunities in the European cable industry. At the time, LMI’s primary asset was still its stake in UnitedGlobalCom (which Liberty had increased to 53% equity and 90% voting), which at that point included the UPC Broadband European cable assets, the Chellomedia programming business, and Chilean broadband provider VTR as well as some smaller assets. UPC also acquired French operator Noos for €567 million in July 2004 to create the #1 cable operator in the country, but Liberty divested the business two years later. In partnership with Microsoft and Sumitomo, LMI also held a 45% stake in leading Japanese cable network service provider Jupiter Telecom (J-COM) and a 50% stake in Japanese TV programming affiliate Jupiter Programming (JPC). LMI also retained Liberty Media’s Latin American cable assets including leading Puerto Rican cable operator Liberty Cablevision of Puerto Rico and a stake in Argentine operator Cablevisión SA.

In June 2005, Liberty Media exercised its controlling stake in UnitedGlobalCom to simplify the capital structure by merging the two companies into a new entity named Liberty Global, Inc. (LGI) via a primarily stock- based transaction. LGI continued to opportunistically acquire European assets, including Swiss operator Cablecom for $2.2 billion in October 2005, cable properties in the Czech Republic for $420 million in 2006, and a majority of Belgian cable company Telenet via multiple transactions between 2005-2007. Liberty Global’s acquisition streak moderated over the next couple years as the global recession froze the capital markets, but the Company continued to grow revenue and operating cash flow as broadband and digital cable adoption continued unabated and the Company tightened expense controls. However, the acquisition lull did not last long. Liberty Global entered Germany with a purpose, assembling the #2 German cable company through the acquisition of Unitymedia GmbH for $2.8 billion in cash ($5.7 billion including debt assumption) in January 2010 and the acquisition of Kabel BW Musketeer for $1.4 billion cash ($3.1 billion including debt) in December 2011. The Company added Polish broadband provider Aster for $785 million in September 2011. These acquisitions were balanced with the Company’s exit from major non-European operations including the sale of J-COM in 2010 for $4.0 billion in gross proceeds and its majority stake in leading Australian telecom operator Austar for $1.1 billion in 2012.

Liberty Global’s transformation into a dominant European cable operator took another huge step forward in 2013 with the acquisition of leading UK broadband provider Virgin Media. Completed in June 2013, the transformative acquisition increased Liberty’s customer base by roughly a third in a deal valuing Virgin Media at an implied enterprise value of $23.3 billion. Last but not least, Liberty is in the midst of establishing a near-nationwide cable presence in the Netherlands with the pending acquisition of Ziggo.

Business Overview Liberty Global is the largest international broadband communications multiple-system operator (MSO) with cable (and to a much lesser extent, satellite and mobile) operations under a number of subsidiary brands in 14 countries or territories, primarily in Western Europe as well as other parts of Europe and Latin America. As of June 30, 2014, the Company provided services to 24.5 million unique customers accounting for 48.9 million subscription services or revenue generating units (RGUs) across television (21.7 million), broadband Internet (14.8 million), and fixed line and mobile telephony (12.4 million).

As illustrated below, the Company’s revenue base is widely diversified across Europe except the UK which contributed 38.3% of revenue in 1H 2014 following the acquisition of Virgin Media in June 2013. The “big 5” countries of operation for Liberty are (in order of revenue contribution) the UK; Germany (15.2% of 1H14 revenue) through wholly owned subsidiary Unitymedia KabelBW; Belgium (12.7%) through 57.2% owned subsidiary Telenet Group Holding N.V.; and Switzerland (7.9%) and the Netherlands (6.9%) through wholly owned UPC Holding. UPC Holding operates in a total of 9 European countries and has 8.9 million customers and 16.8 million total RGUs. This includes mobile offerings in four countries as well as UPC Direct (UPC DTH), which offers direct to home (DTH) satellite TV service in Hungary and Ireland, under the freeSat brand name in the Czech Republic and Slovakia, and under the FocusSat brand in Romania. Notably, the Netherlands will become Liberty’s second largest operating division assuming the acquisition of competitor Ziggo N.V. is completed as expected later this year. Pro forma for Ziggo consolidation (prior to any impact from divestitures), the Netherlands would have contributed approximately 16% of total Company revenue during 1H 2014.

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Collectively, the Company’s operations across 12 European countries are reported as the European Operations Division. In addition, the Company has a small but meaningful Latin America business, primarily in Chile (5.0% of 1H 2014 revenue) through its 80% owned subsidiaries VTR GlobalCom and VTR Wireless as well as in Puerto Rico (1.7%) through the 60% owned subsidiary Liberty Cablevision Puerto Rico.

Liberty Global 1H 2014 Performance by Geography ($ millions) Revenue: 1H14 % Operating Cash Flow1: 1H14 % European Operations Division: UK 3,502.5 38.3% UK (Virgin Media) 1,508.9 35.3% Germany 1,384.7 15.2% Germany (Unitymedia KabelBW) 860.0 20.1% Belgium 1,156.6 12.7% Belgium (Telenet) 590.0 13.8% Switzerland 718.1 7.9% Switzerland 426.0 10.0% The Netherlands 634.4 6.9% The Netherlands 368.4 8.6% Poland 241.7 2.6% Other Western Europe 228.0 5.3% Ireland 241.7 2.6% Total Western Europe 3,981.3 93.2% Austria 222.4 2.4% Central and Eastern Europe 283.9 6.6% Hungary 129.4 1.4% Central and other (121.3) (2.8%) The Czech Republic 102.0 1.1% Total European Division 4,143.9 97.0% Romania 74.2 0.8% Chile (VTR) 168.5 3.9% Slovakia 32.6 0.4% Corporate and other (44.0) (1.0%) Other 66.5 0.7% Intersegment eliminations 4.0 0.1% Total European Operations Division 8,506.8 93.1% Total 4,272.4 100% Chile 455.1 5.0% Puerto Rico 151.3 1.7% Other, including intersegment eliminations 22.7 0.2% Total 9,135.9 100%

In addition to its numerous cable properties, Liberty also holds a smaller collection of TV programming assets and other investments. Liberty Media’s other investments include a small stake in Sumitomo Corp. (publicly valued at approximately $600 million) that traces back to a share swap related to the companies’ Jupiter joint ventures, and a 17% stake in Polish DTH operator ITI Neovision SA (formerlyCanal+ Cyfrowy SA) valued at upwards of $200 million.

Management: Holding Company An essential component of the Liberty Global investment thesis is the Company’s uniquely strong management and ownership. As we highlighted in the introduction to the AAF 2014 Summer Issue, holding companies can be a particularly rewarding area of investment when controlled by best-in-class capital allocators and operators. John Malone certainly fits this category. While Mr. Malone’s economic interest in Liberty Global has been diluted slightly over the years (primarily from the Virgin Media deal), he still holds an approximately 3.3% equity stake and 28% voting power due to his super-voting Class B shares. Malone remains an active chairman at Liberty Global and is an instrumental leader in orchestrating the Company’s M&A and capital return policies, as well as providing a high-level strategic vision for the future of the Company’s broadband business. It almost goes without saying that John Malone and co. have a hall of fame-worthy track record of shareholder value creation going back several decades. We would also note that this has been no different at Liberty Global. Liberty Global shares have increased approximately 350% over the slightly more than 10 years since the spinoff from Liberty Media in 2004, versus roughly 80% for the S&P 500. John Malone’s success at Liberty Global as well as TCI and Liberty Media reflects his long-term vision for the cable industry combined with a brilliant financial strategy to maximize shareholder returns. This has included creatively structured and tax efficient strategies to exploit market discounts including large-scale M&A, share repurchases, spinoffs, Reverse Morris Trust combinations, tracking stocks, shareholder rights offerings, asset swaps, recapitalizations, etc. Liberty also utilizes a holding company structure to maximize balance sheet flexibility at the parent level and reduce risk from affiliate leverage.

1 Liberty Global’s preferred operating metric, operating cash flow (OCF) represents unlevered, pretax cash flow from continuing operations. - 68 - Liberty Global plc

Today Liberty Global is no longer the extremely diverse holding company that Liberty Media was at the time of the separation from AT&T, but rather a fairly concentrated European cable systems operator. This reflects Malone/Liberty’s long-term vision of simplifying its corporate structure via multiple spinoffs, mergers, and divestitures. However, it should not be interpreted that there are no longer opportunities for the Company to realize value. Putting aside the attractive tailwinds of the European broadband business, as detailed later, M&A, spinoffs, and large scale return of capital to shareholders should continue at LGI. Another spinoff/tracking stock, this time consisting of Liberty’s Latin America cable operations, is also in the works. Furthermore, Malone and company’s leveraged return on equity investment philosophy, combined with the fragmented but highly scalable fixed cost nature of the European cable industry, present a uniquely compelling combination in the current macro environment. Interest rates remain at or near historical lows, access to capital markets is good, and equity market valuations (particularly in Europe) remain reasonable.

Importantly, LGI’s day to day operational management is also in good hands with President and CEO (and board member) Mike Fries. Mr. Fries has held his current position ever since Liberty Global was formed via the merger with UnitedGlobalCom in 2005, building an almost 10 year track record of success. Before that, he was President and eventually CEO of UnitedGlobalCom and was a founding member of the management team that led Liberty/TCI’s initial international expansion. Mr. Fries holds ~4.5 million Liberty Global shares and appears committed for the long term.

At a sprightly 73 years of age, we would not expect Mr. Malone to be going anywhere anytime soon. However, the Company has established even longer term visibility with a transition plan that would allow Mr. Fries (age 51) to assume the leading role. In February 2014, Malone and Fries reached an agreement that will allow Fries (or any entity he controls) the right of first refusal to negotiate the purchase of, or else match any third party offers for, any Class B shares the Malone Trust (or permitted transferees) determines to sell. He also has the right to vote the Class B shares if the Malone Trust ever elects not to exercise its voting rights. These rights last so long as Mr. Fries is a principal executive or board member at Liberty Global.

Transformative Acquisitions in 2013-2014 European cable is still far more fragmented than the North American market, but in recent years Europe has seen an upsurge in consolidation activity that continues unabated. Liberty has been an active participant in the market and recently completed or is nearing completion of two transformative deals. Below, we detail the Company’s recent activity.

Virgin Media Over a decade after failing to orchestrate the merger of UK cable properties Telewest and NTL, Liberty Global finally acquired their successor Virgin Media (VMED) in 2013. Announced in February 2013 and completed on June 7, 2013, the deal initially valued Virgin Media equity at $16 billion (assuming VMED convertible debt conversion) or $47.87 per share, representing a 24% premium to VMED’s stock price prior to the announcement. Inclusive of assumed debt, the deal initially valued Virgin Media at an approximately $24 billion enterprise value (£14.2 billion at the then-prevailing exchange rate). VMED shareholders received $17.50/share in cash plus a combination of Liberty Global Class A (0.2582 shares per VMED share) and Class C non-voting (0.1928 exchange ratio) stock that translated into an approximately 36% equity stake and 26% voting stake in the combined entity. In conjunction with the transaction, Liberty Global, Inc. re-domiciled to the UK and reincorporated as Liberty Global plc.

Virgin Media Acquisition Consideration Cash $ 5,645 Liberty Stock at 2.5.13 price $ 9,803 Additional VMED convertible debt @ 12.31.13 fair value $ 164 vested VMED stock $ 270 Total Equity Consideration $ 15,883 assumed £/$ 1.575 Equity Consideration (GBP) £ 10,084 VMED Net Debt, Dec. 31, 2012 £ 5,179 Total Enterprise Value £ 15,263 - 69 - Liberty Global plc

Top Quality Assets At the initial prevailing rates and stock prices, Liberty’s acquisition price represented a valuation multiple of 9.2x trailing EV/EBITDA (our calculation) and 8.8x EV/OCF (LGI estimate) based on VMED’s 2012 earnings. This is a slight premium to historical transactions in the industry, which have averaged closer to 8.0x-8.5x EBITDA. Although the price tag on a trailing basis looked unexciting, Virgin Media offered a unique high quality asset with attractive growth prospects in addition to its premier brand value. At the close of 2012, Virgin’s footprint passed approximately 13 million homes or ~50% of the UK market. With only 38% penetration of its footprint vs. 58% at LGI, Virgin had plenty of room to grow both in the existing network and through incremental buildouts. Virgin had 4.9 million unique residential cable customers who accounted for 12.25 million RGUs including 3.8 million video, 4.3 million cable broadband Internet, and 4.2 million fixed line telephony subscriptions. Importantly, Virgin also possessed the high quality infrastructure necessary to support further growth.

Virgin Media Customer Base at Dec. 31, 2012 (millions) YE 2012 Cable: Telephone 4.18 TV 3.80 Broadband 4.27 Total Cable RGUs 12.25 Unique Customers 4.89

Mobile: Postpaid 1.71 Prepaid 1.33 Total mobile customers 3.04

Virgin Mobile’s cable network is competitively advantaged versus primary competitor BT Group, with a much deeper fiber access network and DOCSIS 3.0 upgrades enabling nearly 100% digital cable and triple play capabilities. Virgin had recently upgraded over three-quarters of its broadband network to 2x speeds, offering up to 100Mbps to customers with a 300Mbps program in the works. Virgin offers the highest average broadband speeds and over half of broadband customers subscribed to very high speed plans (30Mbp or greater) at the time of the acquisition, representing an impressive 63% share of the UK very high speed broadband market.

Virgin’s cable television business faces tougher competition primarily from Sky (British Sky Broadcasting), which is both a dominant pay TV competitor and a programming supplier to Virgin and can offer a deeper slate of programming while controlling content costs. However, Sky is primarily a satellite delivered service that relies on BT for bundled Internet. We believe the broadband business is more attractive long term (especially in the UK/Europe where free broadcast TV is still dominant) given the higher margin structure and ever increasing demand for Internet content/speed. Virgin’s triple (and quadruple) play bundling is also an advantage. In any case, Virgin still offers leading video services including the Virgin TV Anywhere Internet streaming, mobile TV platform. Virgin also has an exclusive partnership with TiVo to offer “next generation” DVR-enabled set top boxes featuring TiVo user interface software. Over 35% of video subscribers were already on its next generation platform at the time of the acquisition. VMED’s other video products include subscription video on demand (SVOD) offerings and the Virgin Movies transactional video on demand service.

The Virgin acquisition also added a strong business to business (B2B) segment through Virgin Media Business, which generated a healthy 16% of revenue at the time of the acquisition. Virgin also offers a quadruple play platform with the Virgin Mobile virtual network business (14% of 2012 revenue), which utilizes third party networks to provide mobile telephony services. Virgin had 1.7 million postpaid and 1.3 million prepaid mobile customers at the time of the acquisition. LGI had only minimal commercial and mobile businesses prior to the VMED acquisition, which provided valuable expertise and infrastructure to support introduction of these services in other parts of the LGI footprint.

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Synergies and Tax Savings Lower Cost The Virgin deal offered meaningful incremental financial benefits not reflected in the sale price. Liberty expects to generate at least $180 million in combined cost synergies and capex savings based on estimates the Company characterized as conservative. This includes an estimated $110 million in cost synergies from IT network and middle/back office consolidation, etc. LGI expects to create at least another $70 million in capex savings through joint purchasing arrangements, network centralization, etc.

Virgin Media Acquisition: Attractive Adjusted Multiple VMED EBITDA, FY 2012 £ 1,651 Implied EV/EBITDA (FY12) 9.2x VMED Deferred Tax Assets @ est. NPV £ 1,700 Estimated Synergies £ 114 Implied EV/EBITDA, adj. (FY12) 7.7x Estimated EV/OCF, 2013 (LGI est.) 7.0x

Virgin Media also held deferred tax assets valued at £2.6 billion on its books at the end of 2012, including £1.7 billion in UK net operating losses (NOLs) with no expiration date. The Company conservatively estimated these had a $2.7 billion net present value for Liberty Global. Virgin Media was producing free cash flow and the deal was accretive to free cash flow, so these NOLs are providing a real benefit to LGI. Backing out the NOLs and synergies at conservative estimates, this reduces the implied EV/EBITDA multiple for the transaction to an attractive ~7.7x based on our estimates. Liberty Global also estimated the adjusted forward multiple paid was just 7.0x based on 2013 OCF projections. While we do not believe the impact is meaningful in the near term given Liberty’s lack of domestic (U.S.) operations or dividends/repatriated earnings, the UK domiciliation could also save on corporate taxes over the long term.

Ziggo Established in 2007 following the mergers of Multikabel, Casema, and Kabelcom, Ziggo is the largest cable operator in the Netherlands with 2.6 million customers and over 6.9 million RGUs. Majority owned by private equity firms Cinven and Warburg Pincus, Ziggo completed a partial IPO in March 2012 at €18.50 per share. Liberty soon bought a 12.7% stake from Barclays (€25/share) and spent a cumulative €1.5 billion to build a 57 million share (avg. price €26.40/share) stake in Ziggo by July 2013, equivalent to 28.5% of the company. In October 2013, Ziggo disclosed that in August the company had rejected an undisclosed acquisition proposal from Liberty Global as inadequate.

On January 27, 2014, the companies reached an agreement on a revised offer for all of Ziggo. Ziggo shareholders will receive €11 per share in cash and a combination of Class A (0.2282 LBTYA per Ziggo share ratio) and Class C (0.1674) shares. Following LGI’s completion of a Class C dividend to shareholders in March 2014 (one-for-one distribution of Class C shares for each outstanding Class A, B and C share), the ratio will be adjusted to 0.563 Class C shares. The total purchase price represents an equity value of approximately €34.50/share or €6.9 billion, a premium of 38% to Ziggo’s average trading price prior to Liberty’s initial disclosure of a Ziggo stake in March 2013. Ziggo shareholders will gain an approximately 13% economic interest and 9% voting rights in LGI stock. Including debt, the total valuation is an approximately €10 billion enterprise value or a healthy 11.3x 2013 EV/EBITDA.

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UPC/Ziggo Combination to Create Nationwide Footprint

Source: Company presentation, February 2014

Despite the high headline valuation, like the Virgin Media case this deal’s effective price should be much more modest. Ziggo possesses a best-in-class cable network, and the combination of Ziggo and LGI’s UPC Netherlands offers particularly strong economies of scale. The companies have no network overlap, and a combination would create a truly national footprint with coverage of over 90% of Dutch households. LGI management is targeting €160 million in annual run rate synergies by 2018. This includes €120 million in cost synergies split between €95 million in operating expense savings and €25 million in capex savings. The Company believes Ziggo can create another €40 million in revenue synergies by 2018. Like Virgin, Ziggo also possesses a growing B2B segment, and an upstart mobile virtual network business. The Company expects to generate revenue synergies in these businesses by exploiting Ziggo’s brand on the marketing side and utilizing Ziggo’s sales/operations teams to expand the MVNO and B2B platforms in the UPC footprint. Including the targeted synergies and based on a total cost basis (accounting for the initial equity acquisitions), Liberty Global’s purchase price represents a valuation of approximately 9.3x 2014E EBITDA and 14x 2014E EBITDA minus capex.

The transaction is still pending an extended regulatory/antitrust review by the European Commission, with an announcement currently expected by November 3, 2014. But by all accounts LGI is on track to gain approval following its commitments to divest premium pay TV channel Film1 (Ziggo has a stake in competitor HBO in the Netherlands) and guarantee open access for OTT providers.

Dominant Competitive Position After Transactions The Virgin Media and Ziggo transactions further solidify Liberty Global’s dominant competitive position in most of its markets. Following completion of the Ziggo transaction, Liberty will be the #1 operator in 11 of 14 territories including 9 of its 12 European countries of operation, and #2 in the remainder. This includes the leading market share in 4 of its top 5 regions, with its third largest market (Germany) the exception. In Germany, the Company is a distant second to Kabel Deutschland (KDG) in terms of market share. However, the two companies do not overlap and LGI is the leader in its 3 states of operation; Unitymedia is the #1 cable provider in the federal states of North Rhine-Westphalia and Hesse, and KabelBW is #1 in Baden-Württemburg. As noted, in the Netherlands a combination of Ziggo and UPC will create a dominant national network with 4 million unique consumer subs. This is far ahead of next largest competitor Telco KPN with 1 million Digitenne IPTV subscribers. The Company has also noted a marked decrease in competitive pricing pressures from KPN over the past 3-4 quarters.

In addition to its scale advantages, Liberty Global is also well positioned across its footprint in terms of its network. Liberty is the leader in average broadband speed across most of its network and continues to rapidly upgrade its capabilities. According to the Company’s estimates, its weighted average downstream broadband speed increased by 36% Y/Y to 56 Mbps in 2Q14. In Belgium, Telenet announced a €500 million investment to upgrade to a 1GHz network, enabling 1Gbps download speeds. In the UK, BT and backbone

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providers are investing heavily in fiber. But Virgin remains the clear leader in broadband and the Company’s UK broadband subscribership has increased by another 2.5% over the year since the acquisition closed.

Historical Performance and Outlook: Huge Long Term Tailwinds in European Cable An integral component of the Liberty Global investment thesis is the European cable market is still in a much earlier stage of development than in the U.S. This is true in terms of both network provider fragmentation as well as consumer penetration levels, and for both traditional video (pay TV) and broadband products. As the leading operator in Europe, by far, this gives Liberty Global a uniquely compelling long term opportunity. Liberty has leverage in terms of customer pricing, in negotiating for programming, as well as in the M&A field. The Company is also positioned to set technological standards in the industry and forge favorable partnerships with wireless providers, traditional content providers, upstart “over the top” (OTT) Internet video providers, etc.

In the video segment, pay TV penetration is only 41% across Europe versus 90% in the U.S., according to Ovum Ltd. research.2 Free to air (FTA) broadcasters still control ~70%-80% of viewing. This is closer to the U.S. market 20 years ago than today, although the market is more developed in parts of Western and Northern Europe. Pay TV penetration in Europe is not expected to reach U.S. levels anytime soon (if ever) due to cultural and market differences, but this still leaves plenty of upside. At the same time, this means content costs are ~80% lower than in the U.S. Analog-to-digital cable TV transition is also still in a much earlier stage in Europe. The Company is ahead of the market, but still only reached 64% digital penetration among video subscribers. The penetration rate has increased ~3% each of the past 2 years from 58% in 2Q12. Notably, digital TV migration enables “more than twice” the analog ARPU according to CEO Fries.

High speed broadband Internet adoption is another major tailwind in Europe. According to the European Commission, fixed broadband penetration is still just 28.8% of households within the European Union as of January 2013. Penetration has been steadily growing at 50-100 bps per year since 2008 and there is no reason to expect this to slow down anytime soon.

Fixed Broadband Penetration, European Union level, 2004-2013

35.0%

28.8% 30.0% 27.7% 28.1% 26.4% 27.0% 24.8% 25.4% 23.8% 25.0% 22.8% 21.6% 20.2% 20.0% 18.2% 16.2% 14.2% 15.0% 12.1% 10.0% 10.0% 8.2% 6.2% 4.9% 5.0%

0.0% Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13

Source: Communications Committee, European Commission

Obviously, the Company is ideally positioned to capitalize on consumer Internet uptake. Liberty Global’s Internet penetration is slightly higher than the EU average but is also growing faster. The Company estimates it is winning an extremely impressive 75% share of new broadband subscribers in its top 5 markets. Subscribership totaled 11.2 million or 32.3% penetration of two-way (Internet capable) homes passed within Liberty’s footprint in Western Europe in 2Q 2014. This is up an impressive 700k or 150 bps (penetration rate)

2 http://www.bloomberg.com/news/2013-10-30/cable-cowboy-malone-s-irish-castle-signals-europe-focus.html - 73 - Liberty Global plc

from 10.6 million or 30.8% penetration in 2Q 2013. Germany is a particularly attractive opportunity in Western Europe. In Germany, the Company has 2.7 million Internet subscribers but this still represents just 22.3% penetration of two-way homes passed. This is up a strong 260 bps from 19.7% in 2Q13. As noted, the Company has also experienced 2.5% broadband sub growth at Virgin since acquiring the business. Penetration is still only 35% of homes passed at Virgin. In Central and Eastern Europe, penetration is slightly lower at 30.5% of 2-way homes passed but increased by almost 200k or over 120 bps to 2.5 million total subs at June 30, 2014.

Customer Product Bundling (2Q 2014)

Triple-Play 42%

Single-Play 42%

Double-Play 16%

The combination of digital TV transition and Internet penetration gains translates to a huge opportunity for Liberty Global to increase product bundling amongst its customer base. At 2Q14, the Company still had only 14.2 million or 58% of customers with bundled services including 4 million dual-play subs. LGI averages just 2.0 products per customer and triple play penetration is only 41.9%. This is up from 39.0% only one year earlier. By comparison, in the U.S. Comcast reached 68% bundled service penetration in 2Q14.

Liberty Global should also face lower risk from OTT services (which we already believe is an overrated risk for programmers and especially cable systems providers) given lower pay TV penetration and video ARPU versus U.S. distributors, combined with the expansion of mobile/Internet delivered TV packages. John Malone has characterized OTT services like Netflix as “frenemies,” and they are arguably friends more so than enemies for Liberty Global, in our view. Streaming video and OTT popularization drives demand for high speed data, and incremental broadband subscribership and ARPU should more than offset the impact on the video side. In some cases (including the UK), the Company is even partnering with Netflix or other OTT services so they are available via the cable box, with revenue sharing agreements in place.

Liberty Global Historical Financial Performance ($ millions) 2010 2011 2012 2013 1H13 1H14 Total Revenue $8,364 $9,511 $9,931 $14,474 $8,520 $9,136 Total revenue growth ex. FX, acquisitions 5.0% 4.5% 5.8% 3.7% NA 2.7% EBITDA $3,645 $4,275 $4,645 $6,289 NA $4,022 EBITDA Margin % 43.6% 45.0% 46.8% 43.4% NA 44.0% OCF (unlevered pretax) $3,882 $4,482 $4,831 $6,741 $3,826 $4,274 OCF margin % 46.4% 47.1% 48.6% 46.6% 44.9% 46.8% OCF Growth, rebased 5.8% 4.8% 4.1% 4.1% NA 6.7%

These industry tailwinds are evident in Liberty Global’s historical operating performance. Despite the challenging economic environment in Europe, the Company has posted organic revenue growth averaging in

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the mid single-digits (rebased for acquisitions and in constant currency). Organic revenue growth was 3.7% in 2013 (4.8% excluding Virgin Media) and 5.8% in 2012. Lower video content costs and higher contribution from the higher margin broadband Internet business are evident in Liberty Global’s EBITDA or OCF margins. OCF margins were 46.8% in 1H14 (EBITDA margin 44.0%) compared to 41.1% cable segment OCF margins for leading US cable company Comcast. Europe segment OCF margins were an even more impressive 48.7% in 1H 2014. The Company has also expanded margins over most of the past 5 years. EBITDA margins increased from 43.6% in 2010 to 46.8% in 2012 and were up slightly in 2013 excluding the impact of Virgin Media’s lower margin profile. OCF growth increased to 6.7% (rebased for acquisitions and currency fluctuations) in 1H 2014 versus 2.7% rebased revenue growth.

Strong Free Cash Flow and Capital Deployment Liberty Global’s wide and expanding margin profile has combined with declining capital intensity to produce a highly attractive free cash flow stream. While the cable business is very capital intensive, the Company’s revenue stream, high quality infrastructure base, and growing economies of scale have enabled capital expenditures to decline from over 20% of revenue in 2010-2011 to 18.8% in 2012 and just 17.1% in capital expenditures on PP&E declined to 20.6% of revenue in 1H 2014 from 21.9% a year earlier (inclusive of VMED). This has produced a strong, growing free cash flow profile. Liberty Global’s TTM free cash flow exceeded $1.6 billion (>$2 per share) and the Company continues to target a mid-teens annual growth rate. The Company also has deferred tax assets valued at roughly $5.5 billion remaining to shield against cash taxes.

This has allowed Liberty Global to undertake large scale acquisitions without significantly increasing balance sheet leverage. Liberty’s consolidated gross debt has consistently averaged close to 5x OCF or the high end of management’s 4x-5x long-term target range, with net debt remaining below 5x. Virgin Media was actually a modestly deleveraging transaction, and the Ziggo transaction should not meaningfully increase the Company’s leverage ratio. The Company repaid $2 billion of debt in 4Q13 and further reduced gross leverage from 5.3x at 4Q13 to 4.9x at 2Q14. The Company has also taken advantage of the low interest rate environment to markedly improve its debt profile in recent years. Liberty’s average borrowing costs are 6.6%, down from 8.0% at the end of 2011. At the same time, the Company has been extending the maturity schedule of its debt. Approximately $33.4 billion of $40.7 billion in debt or 82% matures after 2019.

Liberty Global Free Cash Flow & Leverage ($ millions) 2010 2011 2012 2013 1H13 1H14 CFFO $2,329 $2,736 $2,838 $3,921 $2,255 $2,917 PPE additions $1,766 $2,132 $2,259 $3,162 $1,865 $1,881 % revenue 21.1% 22.4% 22.7% 21.8% 21.9% 20.6% Capex $1,691 $1,927 $1,868 $2,482 $1,470 $1,402 % revenue 20.2% 20.3% 18.8% 17.1% 17.3% 15.3% FCF $407 $672 $885 $1,125 $659 $1,040 Adj. FCF $791 $791 $1,025 $1,336 $769 $1,075 Repurchases $885 $913 $981 $1,157 $346 $896 Consolidated debt/OCF 5.0x 4.9x 5.3x 5.3x 5.2x 4.9x Consolidated net debt/OCF 4.1x 4.5x 4.7x 4.9x 5.0x 4.8x

At the same time, Liberty Global has consistently returned capital to shareholders on a large scale via share repurchases. On a combined basis, the Company repurchased over $10 billion worth of shares between 2005-2013. Liberty spent $981 million on repurchases in 2012 and in 2013, the Company purchased $1.15 billion in Class A (6.6 million shares pre-split) and Class C (9.1 million pre-split) shares at an adjusted average price of $36.71, effective for the January 2014 Class C share dividend. Virgin also repurchased 22% of its own shares between 2010-2012. The Company has continued to repurchase shares at a rapid pace since the acquisition. During 1H 2014, Liberty spent a total of $896 million to repurchase 13.0 million Class C shares (avg. price $41.80) and 8.1 million Class A shares (average price $42.19). Liberty’s board issued a $3.5 billion authorization in June 2013 and expanded the authorization by $1 billion to $4.5 billion in December 2013 with the expectation of completing the repurchases by the end of 2015 ($2.6 billion remains available under the authorization).

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Disciplined Acquisition and Divestiture Strategy Should Continue Economies of scale and synergies from consolidation are particularly strong in the telecom industry. This includes the usual advantages like procurement and SG&A cost savings as well as substantial network sharing benefits. Consolidation also gives LGI/cable companies improved negotiating power against content suppliers, which can help limit the extent of ever-escalating programming cost inflation. Scale also provides unique and possibly overlooked benefits, particularly when approaching regional supra-national or nearly pan- European scale like Liberty Global. These include influence over regulatory matters, in setting technology standards and launching new products and services, and lowering the cost of capital.

Importantly, Malone and the Liberty entities have a long history of investment discipline and a willingness to walk away from deals if the economics are not clearly in their favor. In other cases, Liberty has patiently waited years (even over a decade) to gain complete ownership of minority/partial investments. Liberty Global has also demonstrated continued discipline in recent years, watching from the sidelines or backing away from several deals. For example, Liberty has slowly increased its stake in Belgian subsidiary Telenet over the course of a decade. In December 2012, the Company launched a tender offer for all remaining shares outstanding. However, the Company was only able to complete $526 million in repurchases (increasing its stake from 50% to 58%) and Liberty elected not to increase its bid for the time being. Last summer, Liberty also walked away from negotiations to acquire #1 German cable operator Kabel Deutschland (KDG) to avoid a bidding war in the face of an aggressive counter-bid by UK-based telephony giant Vodafone plc. The Company also sat on the sideline earlier in 2014 while Vodafone reached an agreement to acquire Spanish cable operator Ono SA, a property in which LGI management had previously expressed possible interest.

The Company has also shown a willingness to exit unattractive or sub-scale markets when the price is right, or to avoid them entirely. The Company’s current European footprint encompasses 10 contiguous markets plus the UK and Ireland. Its “core 5” markets all feature more favorable GDP, employment, demographic, etc. trends than most of the rest of Europe. The Company sold its UPC France subsidiary in 2006 after receiving a generous €1.25 billion (11.4x 2005 operating cash flow) offer from Numericable. The French macro and regulatory environments were not ideal for Liberty, and Numericable (controlled by a highly acquisitive private equity consortium) presented additional competitive challenges that would have made it difficult to gain national scale in France. Since then, the Company has continued to stand on the sidelines in France while cable/telecom consolidation has ramped up. The Company has also stayed out of Italy, Portugal, Spain, etc.—countries that face much more challenging macroeconomic and regulatory/cultural challenges than most of Europe, which could be at least partially responsible for the Company’s lack of participation. The Company also exited less attractive Scandinavian markets in 2006, selling its Norwegian broadband business for $537 million and its Swedish operator for $437 million. The subsequent decisions to exit Japan and Australia also made strategic sense given the lack of synergies with the Company’s core European assets.

Looking forward, Liberty Global intends to continue to play a consolidating role in the European cable industry given the attractive economies of scale. As evidenced with the Virgin and Ziggo deals (as well as passed up deals like KDG and Ono), there are still plenty of large deals to be made in Europe. However, we would expect the relative impact of additional M&A activity to decline going forward given LGI’s recent enterprise value growth. The Company has also dismissed investments in satellite TV and mobile telecom, which we view positively given their more bruising price competition (particularly in mobile) and long term competitive threats from the broadband sector. As CEO Fries described in a Wall Street Journal interview earlier this year,

“That [M&A] story line is not coming to an end, but it is slowing down. The acquisition opportunities in terms of cable television assets are fewer, and our market expectations in terms of how many more markets we want to expand into is a smaller universe. Portugal is too small. Italy doesn't have any cable. And we wouldn't get into the satellite business. There are a couple of markets in Central and Eastern Europe that still require some consolidation. Poland would be one of them. It is a pretty competitive market with lots of fragmented [cable] operators.” 3

3 http://online.wsj.com/articles/next-step-for-liberty-global-content-1406667563 - 76 - Liberty Global plc

Programming Investments Another area of investment is television programming. The Company has already made 3 investments in content in 2014 to date. In May, LGI acquired 50% of UK-based global production company All3Media (in a 50/50 joint venture with another Malone-affiliated entity, Discovery Communications) from Permira at a €550 million valuation. The Company acquired 6.4% equity in leading UK broadcaster ITV for £481 million in July 2014. LGI, through Telenet, also made a small €60 million investment for a 50% stake in Belgian commercial broadcaster De Vijver Media in June. The Company has also remained in long-running discussions to acquire Formula One racing television rights in partnership with Discovery.

Despite the number of transactions this year, management has described them as one-off opportunities. The relatively small All3Media investment was completed at a reasonable 8.5x EBITDA. The ITV shares were purchased from BSkyB, which was previously required to reduce its ITV equity stake for regulatory reasons and likely was seeking additional liquidity to fund its recently agreed $9 billion deal with News Corp. to consolidate European affiliates. The Company also stressed it has no current intentions to acquire ITV and Virgin plans to focus on broadband, not to compete with Sky for programming rights. Management’s cautious approach to programming appears believable in light of the recent sale of its primary programming business, Chellomedia (a collection of European and Latin American networks), to AMC Networks for $1.0 billion. The deal was completed in January 2014 at a reasonable ~9x-10x forward EBITDA in a tax efficient transaction (only $9.5 million tax expense for LGI). Management also described the deal as freeing up the Company to invest in “more strategic” content. We would also note Malone has elected to use other entities for other European programming investments, such as Discovery Communications’ acquisition of European sports network Eurosport. Liberty’s two major programming investments in 2014 were both UK based, which could reflect a strategic response to the looming presence of News Corp/BSkyB in that particular content market. On the other hand, we would view Liberty Global’s cautious expansion in the content realm as an opportunity more than a risk. Asset Analysis Focus has frequently discussed the underappreciated long-term value in programming content, and Malone and co. have a tremendous record of creating value in the industry at Discovery, Starz, and QVC as well as through various Liberty investments over the years.

Additional Growth Prospects Between organic growth prospects through penetration gains and bundled package upgrades in its existing footprint, combined with strategic M&A, Liberty Global has a long runway for continued growth. In addition, we believe Liberty is also on the cusp of gaining meaningful traction in several business lines that offer long term growth opportunities.

Business to Business Liberty Global has a small but growing business services unit with the additions of Virgin and Ziggo. B2B revenue totaled $750 million in 1H14 (8% of total revenue), and this does not yet include Ziggo’s $83 million in B2B revenue during 1H 2014. Ziggo has doubled its B2B customer count since the close of 2011 to 277k and B2B revenue increased by 20% Y/Y to 10.4% of total revenue in 2Q14. The Company’s scale and network speed advantages should translate well to the B2B market, which is growing even faster than consumer broadband for cable distributors in Europe.

Mobile Mobile represents an underexploited but attractive growth opportunity for Liberty. The Company had only a small mobile presence prior to the Virgin acquisition, predominantly in Belgium. Virgin Media added a leading mobile virtual network operator (MVNO) with 3.0 million subscribers. This provided the expertise and marketing infrastructure that can be exploited beyond the UK. Overall, mobile subscribership increased by 111k Q/Q and 190k Y/Y (4.7%) to 4.25 million at June 30, 2014 but this should still be the early innings for mobile growth. The German mobile business is quickly growing and the Company plans to expand rapidly in the Netherlands through Ziggo, which has 84k mobile customers (up 22k in 2Q14). The Company is also in the process of rolling out MVNO offerings in Switzerland and Ireland with several more countries upcoming.

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Historical Mobile Subscribers 30-Jun-13 31-Mar-14 30-Jun-14 European Operations: U.K. (Virgin Media) 3,026,600 2,998,500 3,041,300 Germany (Unitymedia KabelBW) 190,500 255,300 276,400 Belgium (Telenet) 674,900 779,800 820,800 The Netherlands 3,500 3,500 2,500 Switzerland — — 500 Total Western Europe 3,895,500 4,037,100 4,141,500

Poland 23,300 14,600 13,300 Hungary 5,100 8,500 9,300 Total CEE 28,400 23,100 22,600 Total European Operations 3,923,900 4,060,200 4,164,100

Chile (VTR Wireless) 140,100 83,000 89,700 Grand Total 4,064,000 4,143,200 4,253,800

Importantly, we believe LGI is taking the right approach to the mobile market. The Company has no intentions of building a mobile telecom network, which would be prohibitively expensive and is already a competitive market. Nor does the Company intend to buy its way into the business. As CEO Fries recently expressed, “We are not buying mobile companies that are, in some instances, falling knives—struggling in this competitive environment.”

Instead, with the Company’s large existing cable subscriber base, there are significant opportunities in offering a MVNO service. The Company is already an expert in consumer account management, and with an MVNO the Company can control customer accounts and add a high margin revenue stream without having to make fixed investments in a wireless network. Cost synergies between mobile and cable include marketing and central office infrastructure, while there are also attractive revenue synergies by offering a “quadruple-play” bundle. Nor would we dismiss the network sharing synergies, in terms of WiFi offload/WiFi hotspots adding to mobile network coverage. LGI management does not see any major loss of contract risk on the wholesale MVNO contracts because they own the valuable customer relationships and could transition network providers if need be. Regulators have also recently supported MVNOs, including conditioning wireless telecom sector consolidation on the provision the telecom companies offer MVNO services to new entrants. The Company expects a level of regulatory protection to continue given ongoing consolidation amongst telecom providers in Europe.

The Company is also making an effort to transition toward a predominantly postpaid mobile subscriber base, which is aided by marketing quadruple play options. Postpaid subs typically offer lower churn and higher long-term value. Virgin Mobile is rapidly transitioning, with the decline in prepaid subs from 1.86 million in 2Q10 down to 1.02 million in 2Q14 almost completely offset by postpaid additions (overall mobile customers are down just under 100K to 3.0 million over the same period). More recently, LGI’s mobile postpaid subs increased from 2.7 million a year ago to 3.2 million at the end of 2Q14.

Next Generation Cable Boxes and TV Everywhere Service Liberty Global’s next generation Horizon TV service enables cloud-based DVR viewing across devices, including simultaneous recording of up to 4 programs to DVR. The set top box also enables access to apps through the television. The Horizon GO app and Horizon.tv web browser-base platforms also enable “TV Everywhere” or multi-device viewing, including computer and mobile video viewing. The Company has been aggressively expanding the selection of live TV channels available online, with over 100 channels accessible in some markets.

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The Company has only launched the service in 4 countries so far, but is experiencing rapid uptake. Horizon TV subscribership grew 18% Q/Q during 2Q 2014 to 645k subs across the Netherlands (245k), Switzerland (180k), Germany (135k), and Ireland (80k). In Germany, Horizon TV subscribership increased 34% sequentially during 2Q 2014 without the benefit of service introduction into the KabelBW footprint, which is targeted for Fall 2014. Horizon TV accounted for only 24% of the combined digital TV base across the 3 other countries. Virgin Media also has 2.3 million next generation video service customers through a TiVo-based platform. Combined, this represents only 36% of the Company’s digital cable base across the five countries and just 22% penetration of Company-wide video subs. Liberty has also launched Horizon GO in Poland and is trialing a version of the full Horizon TV in Poland and is targeting Chile as the next launch destination. The expansion of next generation TV services offers very attractive ARPU growth and can reduce customer churn.

SVOD Liberty Global is developing its own subscription video on demand (SVOD) services, including both via traditional pay TV delivery and “over the top” (OTT) Internet-delivered services. In the Netherlands and the Swiss division UPC Cablecom the Company recently introduced MyPrime, featuring several thousand films and television titles available on demand through digital TV and online viewing. The service is free for bundled Horizon and DigiCard subscribers and CHF 9.95/month for traditional video subscribers.

Latin America Spinoff and Expansion Earlier in 2014, Liberty Global management announced they were exploring the separation of its Latin American operations. This could include an initial creation of a tracking stock with the possibility of an eventual spinoff. While Chile is only 5% of Company revenue currently (Latin America is 7% including Puerto Rico), LGI sees an opportunity to repeat “the magic” in Latin America. CEO Fries recently stated that he could “easily identify” $3-$4 billion of EBITDA that could be pursued in the region. The Latin American cable business is still in its youth, with plenty of opportunities to grow both organically and via expansion. Importantly, we view this as virtually free upside for LGI with minimal downside risk: LGI expects to finance any growth off of the holding company’s balance sheet, through the tracker/subsidiary. A full spin could happen further down the road. As a preliminary step to facilitate a broader separation, in January 2014 the Chilean VTR subsidiaries were removed from the UPC credit pool and independently issued $1.4 billion in VTR senior secured notes (10 year, 6.875% notes).

Valuation and Conclusion: Sum-of-the-Parts Discount has Widened Liberty Global shares have outperformed in recent years, gaining 120% over the past 3 years. This reflects steady execution of the Company’s strategy to drive financial performance through investing in its broadband Internet infrastructure and next generation TV platforms to drive uptake of higher ARPU bundled subscription services. At the same time, the Company has built major economies of scale in Europe through accretive acquisitions in Germany, the UK, and the Netherlands, among others, while divesting non-strategic assets. Total customer relationships in Europe have grown to 23.0 million at June 30, 2014 from 15.6 million only three years earlier, while consolidated ARPU is up 21% to over $50/month. In the interim, shareholder value has been further enhanced by large-scale share repurchases at attractive prices.

Despite Liberty Global’s strong recent performance, we believe the Company is still in the middle innings of executing its strategy in Europe. Broadband Internet, and to a lesser extent, pay TV are still highly underpenetrated in Europe compared to the US. The Company’s leading scale and high speed network leave it best positioned to capitalize on these ongoing trends. Operationally, the further integration of Virgin Media (particularly in the mobile and B2B segments) and the pending, highly synergistic acquisition of Ziggo, should spur incremental gains. Nonetheless, in our base case scenario, we conservatively assume Liberty Global’s consolidated organic revenue growth slows from an average of 4.7% between 2008 and 2013 to 3.5%, while expanding EBITDA margins stabilize after the impact of the Ziggo integration.

At 9x 2017E EV/EBITDA, we estimate Liberty Global’s intrinsic value should approach $58 per share over a 2-3 year time horizon. This is roughly in line with the Company’s historical trading multiple and those of other leading international cable properties. In the meantime, Liberty’s free cash flow profile should continue to grow at a double digit rate. Share repurchases could become an even bigger driver going forward as free cash flow increases and M&A declines on a relative basis. Additional upside could come from accretive acquisitions in the Company’s core European footprint, as well as via the planned separation/spinoff of the Company’s

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Chilean business and execution of a similar growth strategy in the attractive Latin America region. We would also point out that Liberty Global Class C shares (LBTYK) Class C shares currently trade at a ~4% discount to Class A shares, which appears excessive given Liberty Global shareholders are unlikely to end up in a situation where voting rights are important anytime soon. By contrast, we would note that the recently-issued Liberty Media Class C non-voting shares (LMCK) have actually traded on par or even at a slight premium to LMCA shares for much of the time since creation earlier this year.

Liberty Global plc – Estimate of Intrinsic Value ($MM) 2017E EBITDA (consolidated) $ 10,952 assumed multiple 9.0x Implied Enterprise Value $ 98,572 less net debt, 2017E $ (46,551) Equity Value $ 52,021 plus investments $ 910 less minority interests $ (4,115) Equity Value, Liberty Global shareholders, 2017E $ 47,906 Diluted Shares Outstanding, 2017E: LBTYA 196.5

LBTYB 11.1 LBTYK 623.7 Liberty Global estimate of Intrinsic Value per Share, 2017E $ 57.62

Current share price: LBTYA $ 43.49 LBTYB $ 43.76 LBTYK $ 41.98 Implied upside, LBTYK @ zero discount 37%

It should be noted that an acquisition of Liberty Global is not outside the realm of possibilities, in the long term. Liberty Global shares have moved upward multiple times in the past years in response to speculation that Vodafone is interested in acquiring the Company. Most recently, Liberty shares advanced by over 4% on September 11, 2014 after Vodafone CEO Vitto Colao expressed interest in transformational M&A and stated to Bloomberg News that he would consider acquiring Liberty Global “at the right price.”4 We do not believe John Malone and the Mike Fries are inclined to sell Liberty Global in the near term; nor do we believe an acquisition is currently in the best interest of long term shareholders given the Company’s growth runway. As Mr. Malone recently stated in response to questions about a Vodafone acquisition, “As a practical matter, this company is not for sale because it represents a very unusually high long-term return on invested equity capital. It's an approach towards wealth building that I totally believe in.” 5

However, we would not dismiss a sale to Vodafone or another telecom peer at the right price at some point down the road. Malone has shown a willingness to sell assets in bubbly markets as with TCI in 1999. While we are not at that stage today, Vodafone and other wireless operators have demonstrated very strong desire to diversify into the cable business—probably for good reasons—and they could continue to drive up prices. Liberty Global is a unique property and estimates of the synergies from a Vodafone/Liberty Global merger have ranged as high as £20 billion in net present value. If a transaction ever were to materialize, it would likely occur at a substantial premium.

Risks Risks that Liberty Global may not achieve our estimate of the Company’s intrinsic value include, but are not limited to, general economic weakness impacting the Company’s businesses; excessive price competition

4 http://www.bloomberg.com/news/2014-09-11/vodafone-ceo-says-liberty-could-be-good-fit-for-right-price-.html 5 http://online.wsj.com/articles/next-step-for-liberty-global-content-1406667563 - 80 - Liberty Global plc from other distributors; television programming cost inflation or failure to negotiate carriage arrangements; unfavorable regulatory rulings impacting pricing or M&A activity; inability to generate expected synergies from integrating acquisitions; excessive balance sheet leverage limiting financial flexibility; and loss of key personnel.

Analyst Certification Asset Analysis Focus certifies that the views expressed in this report accurately reflect the personal views of our analysts about the subject securities and issuers mentioned. We also certify that no part of our analysts’ compensation was, is, or will be, directly or indirectly, related to the specific views expressed in this report.

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LIBERTY GLOBAL PLC CONSOLIDATED BALANCE SHEETS $ in millions

ASSETS Dec. 31, 2013 Dec. 31, 2012 Current assets: Cash and cash equivalents $ 2,701.9 $ 2,038.9 Trade receivables, net 1,588.7 1,031.0 Prepaid expenses 238.2 139.0 Current assets of discontinued operation 238.7 — Other current assets 715.1 516.9 Total current assets 5,482.6 3,725.8 Restricted cash 5.8 1,516.7 Investments 3,491.2 950.1 Property and equipment, net 23,974.9 13,437.6 Goodwill 23,748.8 13,877.6 Intangible assets subject to amortization, net 5,795.4 2,581.3 Long-term assets of discontinued operation 513.6 — Other assets, net 4,702.0 2,218.6 TOTAL ASSETS $ 67,714.3 $ 38,307.7

LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 1,072.9 $ 774.0 Deferred revenue and advance payments from subscribers and others 1,406.2 849.7 Current portion of debt and capital lease obligations 1,023.4 363.5 Derivative instruments 751.2 569.9 Accrued interest 598.7 351.8 Accrued programming 359.1 251.0 Current liabilities of discontinued operation 127.5 — Other accrued and current liabilities 2,344.0 1,460.4 Total current liabilities 7,683.0 4,620.3 Long-term debt and capital lease obligations 43,680.9 27,161.0 Long-term liabilities of discontinued operation 19.8 — Other long-term liabilities 4,789.1 4,441.3 TOTAL LIABILITIES 56,172.8 36,222.6 Equity Class A ordinary shares, $0.01 nominal value. 2.2 — Class B ordinary shares, $0.01 nominal value. 0.1 — Class C ordinary shares, $0.01 nominal value. 1.6 — Series A common stock, $0.01 par value. Authorized 500,000,000 shares — 1.4 Series B common stock, $0.01 par value. Authorized 50,000,000 shares — 0.1 Series C common stock, $0.01 par value. Authorized 500,000,000 shares — 1.1 Additional paid-in capital 12,813.4 2,955.6 Accumulated deficit (3,312.6) (2,348.7) Accumulated other comprehensive earnings, net of taxes 2,528.8 1,600.5 Treasury shares, at cost (7.7) — Total Liberty Global shareholders 12,025.8 2,210.0 Noncontrolling interests (484.3) (124.9) TOTAL EQUITY 11,541.5 2,085.1 TOTAL LIABILITIES AND EQUITY $ 67,714.3 $ 38,307.7

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Disclaimers

Asset Analysis Focus is not an investment advisory bulletin, recommending the purchase or sale of any security. Rather it should be used as a guide in aiding the investment community to better understand the intrinsic worth of a corporation. The service is not intended to replace fundamental research, but should be used in conjunction with it. Additional information is available on request. The statistical and other information contained in this document has been obtained from official reports, current manuals and other sources which we believe reliable. While we cannot guarantee its entire accuracy or completeness, we believe it may be accepted as substantially correct. Boyar's Intrinsic Value Research LLC, its officers, directors and employees may at times have a position in any security mentioned herein. Boyar's Intrinsic Value Research LLC Copyright 2014.

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